Finance company Arc has introduced what it calls a new form of financing for startups.
advance plus, Company’s The “hybrid finance” approach announced on Wednesday (January 11) is designed to form a bridge between traditional venture debt and income-based financing.
“Like traditional venture debt, Arc Advance Plus has a grace period of six months, during which no principal payments are required,” the company said in a news release.
“But unlike traditional venture debt, this offering is free of warrants, covenants, dilution and fees that have hindered a startup’s ability to access growth capital.”
Designed for early-stage startups, the service will allow companies to put future revenues into upfront investment “within 48 hours at a competitive price,” Arc said.
As PYMNTS noted last month, launches come as startups seek new ways to raise money as venture capital becomes more scarce.
Companies rely on deals such as bridge loans, structured equity, convertible bonds and participating bonds to keep valuations high, according to a December report by the Financial Times (FT).
“Everyone is taking corrective action,” said one Silicon Valley investor.
And with last year’s market conditions projected to continue into 2023, even deep-pocketed tech companies were asking themselves: [we need] How can we get funding from next year to 2024 so we can live longer?”
This week, Marc Lore’s disruptive restaurant tech startup changed course amid a difficult funding market.
Jet.com co-founder food company Wonder, envisioned as a hybrid of food delivery, food trucks and ghost kitchens, delivers mobile kitchen vans to consumers’ homes and serves freshly prepared meals. It was conceived as a system that could be used as a vehicle, but is now shifting its focus to a fixed system. – Space mode.
The funding shortfall has also led to fewer initial public offerings (IPOs) in 2022, as trading fell to levels not seen since the 2008 financial crisis. Before.
Meanwhile, a PYMNTS study found that this year is not going to be a good year for fintech companies looking to go public through special purpose acquisition company (SPAC) mergers.
The data show that the pace of SPAC transactions has slowed to low single digits in most cases, especially in payments, shopping and work-related businesses.
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